Judging from the reader discussion sparked by my post on the H-1B/OPT reform bill by Senators Cruz and Sessions, I’ll assume here the bill needs no introduction.
A reader pointed out that the bill appears to have been tabled, but I hope it may serve as a marker for future legislation, and it brings up issues that would be helpful to discuss, which I will do here, especially concerning foreign students, the favored H-1B group of the “Intels” (mainstream tech firms, as opposed to the “Infosyses,” the rent-a-programmer firms).
In the discussion in my last post, a foreign student was quite upset about the bill’s provision to dismantle the Optional Practical Training part of the F-1 foreign student visa. He views OPT as absolutely essential, as it is currently used as an end-run around the yearly cap on H-1B visas, and sees the canceling of the OPT program to be among the most objectionable aspects of the bill. But that misses the point: If H-1B were truly reformed, as this bill would do, the cap would never be hit in the first place, since employers could no longer use H-1B and green cards for cheap, immobile labor — i.e. OPT as an end-run around the cap wouldn’t be needed.
Another provision that has led to discussion is the bill’s replacing the current prevailing wage requirement with a flat $110,000 wage floor. Some people have pointed out, rightly, that this does not take into account regional cost of living variations, nor variations in occupations. But a long-time critic of H-1B, Professor Ron Hira, explained the advantage of having a uniform wage floor (quoted here with his permission):
The $110k wage floor might not stamp out the abuse in the highest cost areas, but it is much more straightforward than wage rules that include: geographic location + occupation + skill level. The three variables allow a large opportunity to misclassify workers to underpay them.
Ron is an expert on the abuses of the Infosyses, but in fact the Intels do such things too. HP, for instance, recently invented a new job title in the industry, Associate Software Engineer, an absurdity similar in intent to the Junior Programmer title used by the Infosyses.
As to the “highest cost areas,” such as Silicon Valley, I argued in my previous post that (a) most of the abuse of H-1B is due to age, with the employers hiring new or recent foreign graduates (in the U.S. or abroad) instead of older (35+) Americans, and (b) even in Silicon Valley new grad salaries are nowhere near $110K. I checked with my own institution, most of whose grads end up in Silicon Valley, and found the mean salary (for those who have offers and report them, two important qualifiers) is about $79K in computer science at the bachelor’s level, with a premium of about $5000 for a master’s. I think that latter figure is a bit low, but still in the ballpark of the national NACE data. In other words, I believe that the bill would be highly effective even in Silicon Valley.
Kim Berry of the Programmers Guild, a strong opponent of the H-1B program, wrote on my blog that even he believes that the bill’s requirement that H-1Bs either have a PhD or 10+ of work experience is too strict. I called that provision of the bill “draconian” in my post, but also pointed out that it is a natural consequence of the industry lobbyists themselves emphasizing the PhD (“50% of U.S. university doctoral degrees in computer science go to foreign students!”). This part of the bill calls them out on that highly misleading claim, so if the industry objects now, it’s their own fault.
On the other hand, merely requiring a master’s degree isn’t the answer either. Rarely is a master’s of much direct value to an employer. (Indirectly, it gives them a “one-stop shopping center” for finding foreign students to hire.) Let’s keep in mind that Bill Gates, Mark Zuckerberg, Larry Ellison (founder and CEO of Oracle) and so on never even got their bachelor’s degree.
In other words having a graduate degree is not a necessary condition for outstanding talent, and it isn’t a sufficient one either. I am becoming increasingly concerned about the trend for universities to establish special programs in which in essence they “sell” a weak master’s, apparently aimed mainly at a foreign-student clientele, with a low bar for admission.
Today’s F-1 foreign student visa program is not the program that I have cherished and supported over the years. Seemingly eons ago, I actually wrote a letter to the California Legislative Analyst, urging that the legislature not place a limit on foreign students in UC graduate programs. Yet, look at what we see today. OPT’s true usage is a sad distortion of the intent implied in its name. OPT, H-1B and green card rules are a joke, written to facilitate employers giving hiring preference to foreign workers over U.S. citizens and permanent residents. We see an engineering dean declaring that foreign students are preferred, “because they will do anything to stay in the U.S.” We see a CSU campus declaring that in a particular semester, graduate admissions will consist ONLY of foreign students. We see tax-supported research money going disproportionately going to foreign student tuition. The influx of foreign students has suppressed PhD salary growth, and thus caused an exit of the domestic students from doctoral programs, as forecast back in 1989 in an NSF report, and has been since quantified in research by George Borjas.
And such research greatly underestimates the impact, I believe. Much more important than adverse impacts on wages is the negative effects on employability; many Americans involuntarily leave STEM because they have difficulty finding work in the field. Policies designed to attract foreign students tend to disproportionally attract weaker ones; on average, the quality of foreign CS grad students is lower than that of their American peers, so the displacement has grave negative implications for the nation’s ability to keep its lead in STEM.
As always, I strongly support rolling out the immigration red carpet for the world’s “best and brightest,” but this is not the way things mostly work today. Indeed, we see mediocre workers win the H-1B lottery while truly talented ones come up empty-handed. The system is urgently in need of true reform.